Employment grows robustly

DESPITE relatively moderate economic growth, Slovakia recorded robust growth in employment last year, and this trend is expected to continue in the next few months, according to the Finance Ministry’s Financial Policy Institute (IFP) as well as the National Bank of Slovakia.

Illustrative stock photoIllustrative stock photo (Source: Sme)

“In terms of a short-term prognosis, the forecast models expect employment growth of 0.4 percent and 0.5 percent, respectively, in the first and second quarters of 2015,” revealed IFP in its material published on April 27, adding that a conservative scenario involves growth of 0.2 percent and 0.3 percent, respectively.

IFP expects that employment in Slovakia would increase in the coming months mainly due to rising domestic consumption and growth of the gross domestic product (GDP), which has begun having a more pronounced influence on employment now that the effects of the crisis have largely disappeared.

The National Bank of Slovakia pointed in its prognosis to an increase in job vacancies to be followed by a rise in employment. The central bank predicts a quarter-on-quarter employment growth rate 0.2 percent.

“Current data on unemployment from employment offices and also the Slovak Statistics Office’s monthly statistics imply that this increase will be stronger,” said NBS analysts.

IFP analysts pointed out that a structural rupture in the relationship between GDP growth and employment has appeared. Economists earlier believed that at least 3-percent GDP growth would be necessary to make employment grow, but it has emerged in recent years that 1.5-percent GDP growth is enough for the number of jobs to increase.

Last year’s employment growth was based on three pillars – services requiring low qualifications, industrial and public sectors.

According to the NBS analysts, the seasonally adjusted unemployment rate in March decreased by 0.16 percentage points to 11.81 percent. The overall unemployment rate dropped more slightly to 13.46 percent. The seasonally unadjusted unemployment rate went down month-on-month by 0.26 points to 12.06 percent.

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